"People are getting a sense that this is a more sustainable recovery for the first time," he said. "More things are working here than ever. We've got bank loans rising. We've got unemployment rate coming down. We've got housing activity. We've got home prices. We've got confidence. And with that comes the ability to pay up for stocks. If you're more confident, it's going to last more than just this year. You can pay a higher multiple. And you're seeing that. You saw it last year. You're seeing it more this year."

Gone this year was the applicability of an old adage among investors to "sell in May and go away."

On "Fast Money," Paulsen said that he expected earnings in the S&P 500 to rise to $106 or $107 per share, or a multiple of 16.

"That tells me we might reach the 1,700 level at some point this year," he added.

Top sectors to own included manufacturing, industrials and materials, Paulsen said. "And I would still own the financials."

Noting that defensive sectors had led the market since February, he also said that valuations were reasonable.

"So what you've got is a completely cleansed sector market," Paulson said. "Even though we're a lot higher – every sector's gone through a relative cleansing – nothing's really too extended, I don't think. I think in the second half, dollar comes off again, emerging world reaccelerates a little faster and we go back to cyclicals."

Trader disclosure: On April 25, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Joe Terranova is long VRTS; Joe Terranova is long SJM; Joe Terranova is long IBM; Joe Terranova is long SPLK; Joe Terranova is long SWN; Joe Terranova is long mini S&P June Futures; Joe Terranova is long Crude Oil; Joe Terranova is long June Futures; Stephen Weiss is long QCOM; Jon Najarian is long WDC CALLS; Jon Najarian is long AMZN CALLS; Jon Najarian is long AKAM CALLS; Jon Najarian is long ZNGA; Jon Najarian is long AMZN; Jon Najarian is long CTSH; Jon Najarian is long CTSH CALLS; Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long JPM; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long VALE.